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Luxury brand advertising is making the move to the Internet

According to projections, 2017 will be the first year ever to see more money spent on online ads than on TV ads. Even premium brands, until now always rather conservative, will also soon be turning to online ads.

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Dirk Lux, CEO at Zenith (Photo: Zenith)

Last year, luxury brands predominately relied on print ads: Newspapers and magazines accounted for 32.7% of all advertising expenditure for watches, jewelry, and similar high-value products. Yet, by 2018, it is anticipated that the luxury segment will be following the general trend of leveraging the Internet as its largest advertising medium. This is the finding of Düsseldorf-based media agency
Zenith
. The agency also, however, includes as "luxury goods" affordable products that strongly drive growth, such as cosmetics and perfumes: These products alone account for 74% of expenditure on ads for luxury products online.

The strongest growth in online adverting can currently be seen in ads on social media. Zenith’s CEO Dirk Lux says that one of the biggest trends in online advertising is the use of artificial intelligence (AI): "Chatbots are taking over some of the communication with the customer. Self-learning technologies predict customer behavior and address the customer in line with this behavior."

With an estimated US$ 205 billion, online advertising will this year make up around 36.9% of all advertising expenditure worldwide. For the first time ever, TV stations will fall to second place, with US$ 195 billion in advertising revenue. These are the figures forecast by the
Advertising Expenditure Forecasts
study, a study conducted regularly by Zenith.